LOS ANGELES – Toy makers and major retailers are bracing for potentially weak holiday sales this year amid concerns that consumers, many squeezed by skyrocketing gas prices or uneasiness over the economy, will spend less on holiday shopping.

Robert A. Eckert, Mattel's chairman and chief executive officer, told Wall Street analysts yesterday the company is contending with "challenges unique to the toy industry."

"It can't be good for the industry when major retailers are saying they expect sales of discretionary items like toys to lag until fuel prices come back down and we see more positive consumer attitudes," Eckert said.

Alfred Verrecchia, Hasbro's president and chief executive officer, also warned it would be unlikely the company will reach its goal of revenue growth for 2004, citing "the uncertain retail environment."

Retailers have ordered less inventory this year than in the past, said Tim Conder, a leisure analyst for A.G. Edwards & Sons Inc. in St. Louis.

"Retailers are being very cautious," Conder said. "The way it's looking, this is going to be a lackluster season, not a disaster, but not gangbusters either."

Apart from the concerns over consumers, retailers are simply managing their inventories more aggressively these days, said Carl Steidtmann, chief economist at Deloitte Research.

"They're basically unwilling to go into the holiday season as flush with toys as they have in the past," Steidtmann said.

The El Segundo-based company reported net income of $255.9 million, or 61 cents a share, in the July-September quarter, down from $270 million, or 61 cents a share, last year.

Mattel said worldwide net sales for the quarter were $1.67 billion, down 2 percent from $1.70 billion in the same period last year.

Hasbro reported revenue fell in the third quarter as sales in its domestic toy and games segments slipped. Sales were $947.3 million for the quarter, down about 2 percent from the $971.1 million generated a year ago.

The Pawtucket, R.I.-based company reported higher earnings for the quarter ended Sept. 26 compared with results depressed by a $17.3 million accounting charge a year ago. Hasbro earned $88.7 million, or 45 cents per share, for the quarter compared to $68.5 million, or 38 cents a share, last year.

Analysts surveyed by Thomson First Call were looking for earnings of 51 cents a share for the latest quarter for Hasbro and 60 cents per share for Mattel.

Mattel's U.S. gross sales were down 9 percent. International gross sales rose 6 percent, but benefited from changes in currency exchange rates of 4 percentage points.

Hasbro's sales were $947.3 million for the quarter, down about 2 percent from the $971.1 million generated a year ago.

Verrecchia said the company's revenues for the rest of this year would more likely be flat, or decrease, than increase, because of "conservative retailers," moderate growth in people's wages and less spending by consumers dealing with high gasoline and energy prices.

Looking ahead to the shopping season, Verrecchia said: "It's too early to know what the consumer will do. We tend to remain in the camp that the holiday season will be good, but not a record breaker."

Shares of Mattel closed down 47 cents, or 2.6 percent, at $17.50 yesterday in trading on the New York Stock Exchange, while Hasbro shares closed down $1.20 cents, or 6.5 percent, at $17.26.